Six Proven Ways to Save Money When Buying a Home

1)    Work with a real estate agent who is looking out for your best interests. The realtor® you choose should really listen to your needs and help you find the home that best meets your requirements at the most affordable price. One thing to keep in mind, if you call the agent whose name is on the sign of the home you hope to buy, that agent is working for the Seller. You want an agent who’s going to represent you, the Buyer, exclusively.

2)  Call around for loan rates and fees. Get a good faith estimate. Not all mortgages are created equal. Finding the best interest rate with the lowest up-front fees can save you $100’s, sometimes even $1,000’s of dollars. Call around, meet with a few lenders, and then get a good faith estimate from two or three. (If you’re having trouble comparing one estimate with another, ask your realtor to help you evaluate them.)

3)    Consider buying a home in need of some updating or minor repairs. However, unless you’re a contractor or a veteran fixer-upper, a home that needs major renovations can cost big dollars and may end up being a very bad investment. What traditionally can be an excellent house for the money, though, is a quality-constructed home built in the 50’s, 60’s, 70’s, or 80’s: Very often these homes are underpriced because they don’t show as well as newer models. If you have a talent for visualizing an updated version, you may be able to buy a home of this sort at a bargain price and fix it up to be your dream home. You’ll want to look for a home needing a few of the following items:

• A fresh coat of paint
• New bathroom fixtures
• New kitchen countertops and appliances
• Updated flooring (a real plus here would be hardwood floors beneath the grungy carpet.
• Extra insulation in the attic.
  

Remember, it’s the things you don’t see that can cost a lot of money in the long run (i.e. a failing foundation, substandard wiring, plumbing, or heating system, a roof that needs replaced, non-functional floorplan, etc.) You’ll need to make a “pros vs cons” evaluation. If the house has a lot going for it and the price is right, it may be worth investing a little more money into renovating the space.

And of course, it’s location, location, location that can mean the difference between making money or losing money on your investment!

4)    Get a home inspection. Although a good home inspector will usually charge somewhere between $250 and $500 for a comprehensive inspection, this is money well spent and could save you from buying a “money pit”.

5)    Although location, location, location is the yardstick for ensuring future profit, you might consider buying in an undervalued neighborhood. This could be a neighborhood where a number of houses have fallen into disrepair, but because of the location or some other factor, people have begun buying these homes and fixing them up. You’ll notice a definite trend toward a nice, rehabilitated neighborhood. Purchasing a home in this type of neighborhood can be a little risky, but the payoff can be huge if the trend is sure and you’re willing to wait a few years in order to get the maximum return on your investment.

A safer bet is to buy in a neighborhood that is often overlooked. This might typically be a small neighborhood where the homes are well-cared for and there’s little turnover. Sometimes homes in these types of neighborhoods get overlooked because they are a little older (and possibly dated). However most will have been well-maintained.

And a sure bet is to buy in the least expensive home in a nice neighborhood and then fix it up so that it’s comparable with the nicer homes in the neighborhood. Whatever you do, never buy the most expensive home in any given neighborhood! That’s a sure way to minimize your profit or maybe even lose money on your investment.

6)    Negotiate the best deal. Again, make sure you have an agent that’s in your corner. Is he/she providing you with information on comparable properties that have sold recently? Is he providing valuable input on the location of the home, the local real estate climate, and any other factors that might affect the price you offer? Will the agent present your offer in person to the Seller so that your best interests are served?          An agent in your corner means dollars in your pocket!

Putting one or more of these tips into action is sure to SAVE you money at closing and MAKE you money down the road!